An avalanche of trouble has caught up with a part of M&G Chemicals. According to a report in The Wall Street Journal, its parent company, Italy’s Mossi & Ghisolfi, has filed for chapter 11 bankruptcy protection for a unit of the business that's still under construction.
At the beginning of October, the company warned that it would not be able to complete construction of a planned plastics plant in Corpus Christi. The $1 billion facility was slated to hold the world’s largest single-line production of polyethylene terephthalate (PET).
But the project was dogged by $1.8 billion in debt and forced to lay off workers to help offset its difficulties. The WSJ reports that the project also suffered from design and engineering troubles and was hit hard by Hurricane Harvey.
The company hoped that the new facility would make it a major world player on the plastics polymers market. But M&G estimated it would take another $505 million to make the facility operational. Now Mossi & Ghisolfi reportedly hopes to set up a $100 million bankruptcy loan to help fund a sale of the plant instead.
According to court documents, the company will have to sell the facility within six months, or it could be in default on the loan.
